CPD IN THE NEWS

On October 11, 2009, when Isaac Dieudonne was two years old, his family moved into a new home in Miramar, Florida. As they began to unpack, young Isaac bounded out the front door in search of fun. The parents found him several minutes later, floating dead in the fetid pool of a foreclosed house. 

Since the financial crisis began in 2008, approximately 5.7 million properties have completed the foreclosure process, and stories like this begin to answer the critical question of what happens to all those homes. While many are resold, too often they fall into disrepair, creating blight that drags down property values and turns communities into potential deathtraps, attracting not just mosquitoes and mold, but crime and tragedy.

According to expert reports, this neglect occurs disproportionately in communities of color, part of a disturbing pattern. While the Supreme Court has reaffirmed the ability to use the Fair Housing Act to challenge discriminatory effects in neighborhoods, the nation’s neighborhood layout looks more segregated than ever, exacerbating the racial wealth gap. There’s no point in having an anti-housing discrimination law if it isn't vigorously employed to prevent a real societal division that drags down minority families. The Justice Department, free of uncertainty about the Fair Housing Act’s future, needs to work to realize the law's intended purpose.

The housing recovery has skipped more low-income neighborhoods.Fifteen percent of homes worth less than $200,000 are still underwater, where the borrower owes more on the house than it’s worth. This is compared to only six percent of homes over $200,000. Property values in low-income neighborhoods have not bounced back to the degree of their wealthier counterparts. 

An important study from Stanford University shows how this housing divide doesn’t align with socioeconomic status, but with race. Middle-class black households are more likely to live in neighborhoods with lower incomes than the average low-income white household. This creates fewer opportunities for minorities, as neighborhood poverty can predict the quality of schooling and the availability of jobs for the next generation. Areport from the American Civil Liberties Union shows that median household wealth for African-Americans continued to drop after the housing collapse, long after median wealth for whites stabilized. They project this to continue well into the next generation, with a drop in the average black family’s wealth by $98,000 more than it would have been without the Great Recession. 

Foreclosures are largely responsible for this widening disparity. Predatory lending was directed at minority homeowners. Subprime mortgages weregiven disproportionately to minority borrowers, and after the housing bubble collapsed, these loans failed at higher rates. Racial segregation prior to the crisis turned these neighborhoods into targets, with subprime lending specialists going door-to-door and luring even those who owned their homes outright into refinances with dodgy terms. Banks like Wells Fargo and Bank of America paid fines for pushing minority borrowers into subprime loans, even when they qualified for better interest rates. But these fines—$175 million and $335 million, respectively—were substantially lower than they paid for other bubble-era abuses. 

More black and Latino borrowers had their wealth exclusively tied up in their homes, and when they lost them, more of their wealth dissipated. Even after the collapse, the Federal Reserve found that from 2010-2013, net worth of nonwhite or Hispanic families fell 17 percent, compared to an increase of 2 percent for white families. 

This wealth transferred in part to Wall Street. Private equity and hedge funds scooped up hundreds of thousands foreclosed properties in low-income communities, and converted them into rentals. This prevented minority homeowners from benefiting from any return in property values, and displaced many from their neighborhoods. And a recent survey of community organizations finds that this has created higher rents and more transient neighborhoods. 

The Department of Housing and Urban Development, along with quasi-public mortgage giants Fannie Mae and Freddie Mac, auction off these homes to investors at a discount, according to a study from the Center for Popular Democracy. The U.S. Conference of Mayors recently passed a resolution urging these government lenders to sell instead to non-profits that would work to protect homes from foreclosure.

And then there is the disparate treatment of foreclosed properties repossessed by banks, known as real estate owned (REO). The National Fair Housing Alliance’s findings in 29 metropolitan areas indicate that REO in communities of color are twice more likely to have damaged doors and windows, overgrown weeds and trash on the premises and holes in the roof or structure. This violates the Fair Housing Act: Banks are responsible for maintenance and upkeep on all properties, and if they neglect that in black and Latino neighborhoods, the Justice Department can sanction them.

The failure to maintain foreclosed properties has multiple negative effects for communities. Blight creates health and safety concerns, acts asmagnets for crime, and lowers property values for neighboring homes. It also reduces the tax base for municipalities, as nobody pays property taxes on an empty house. The city of Detroit has already lost $500 million from foreclosures in the past few years; 78 percent of homes with subprime loans are know foreclosed or abandoned.

Last week, fifteen Senate Democrats, including leaders Chuck Schumerand Dick Durbin and ranking member of the Banking Committee Sherrod Brown, asked regulators to open an investigation into the treatment of foreclosed properties. “The same communities of color that were victimized by predatory lending may now be facing the double whammy of racial bias when it comes to the upkeep of foreclosed homes,” said Brown. But policing foreclosed properties would only begin to close the gap between white and non-white neighborhoods. 

The entire point of the Fair Housing Act, passed shortly after Martin Luther King’s death in 1968, was to reverse the findings of the Kerner Commission, that the country “is moving toward two societies, one black, one white — separate and unequal.” But reading through these statistics, you wouldn’t know the Fair Housing Act existed. We are further than ever from what Justice Anthony Kennedy described as the act’s “role in moving the Nation toward a more integrated society.” It has been impotent in the face of multiple discriminatory shots at people of color, which has opened up a historically large wealth gap and crippled their opportunity. 

Until we figure out another way for the middle class to build wealth other than purchasing a mortgage, the discriminatory effects of our housing system will further a permanent underclass among people of color in America. The Justice Department has an enormous amount of work to do.

Source: The New Republic

“On behalf of our nine million supporters across the country, we are writing to request more information about your positions regarding the revolving door between Wall Street and the federal government,” reads a statement backed by Democracy For America, Rootstrikers, CREDO Action, MoveOn.Org Political Action, the Center for Popular Democracy Action, The Other 98%, Friends of the Earth Action, and American Family Voices.

The missive, which comes as Clinton interrupts her Hamptons vacation to unveil her rural policy platform in Iowa on Wednesday, specifically notes that Clinton has yet to support or comment on Sen. Tammy Baldwin’s Financial Services Conflict of Interest Act. Progressive icon Sen. Elizabeth Warren — who has ties to many of those who signed the letter — has encouraged all presidential candidates to back the legislation, as both Bernie Sanders and Martin O’Malley have done.

“These types of ‘golden parachute’ compensation packages are highly controversial, and for good reason,” the letter reads. “At worst, it results in undue and inappropriate corporate influence at the highest levels of government — in essence, a barely legal, backdoor form of bribery.”

The letter concludes by posing two questions to the Democratic front-runner: “Do you still support the use of this controversial compensation practice?” and “If you become president, will you allow officials who enter your administration to receive this sort of bonus?”

While Clinton has made steps to appeal to the types of progressive voters behind this letter, she has so far resisted pressure from the left to support reviving the Glass-Steagall Act, which separated commercial and investment banking before it was repealed in 1999. And members of these groups who wanted bank antagonist Warren to run for the presidency are on high alert this week after news broke that the Massachusetts senator met with Vice President Joe Biden over the weekend as he considers his own presidential ambitions.

“It’s hard to imagine Democrats’ 2016 nominee will be truly tough on Wall Street banks that break the law, if they won’t commit to banning their advisers from receiving legalized bribes from those same banks,” said Charles Chamberlain, executive director of Democracy for America, a group founded by former Vermont governor and current Clinton backer Howard Dean.

The letter names a pair of Clinton associates who moved from banks to the State Department: Robert Hormats, an undersecretary who came from Goldman Sachs, and Thomas Nides, a deputy secretary who came from Morgan Stanley.

Warren has suggested repeatedly that any candidate seeking her endorsement must agree not to appoint officials with Wall Street ties.

“Anyone who wants to be president should appoint only people who have already demonstrated they are independent, who have already demonstrated that they can hold giant banks accountable, who have already demonstrated that they embrace the kind of ambitious economic policies that we need to rebuild opportunity and a strong middle class in this country,” she said in July.

Source: Politico

SF Examiner - March 6, 2014, by Chris Roberts - After 200 unanswered job applications, Ebony Eisler finally landed a $15 an hour position as a medical assistant in Mission Bay. But since she's a temp worker, she earns less than her co-workers, who make $20 to $25 per hour for the same work.

Still, as a black woman in San Francisco, she is fortunate. The unemployment rate for black people in the Bay Area is 19 percent, according to 2013 U.S. Census Bureau data crunched by the Economic Policy Institute.

Blacks are unemployed at more than three times the rate of workers of other races, according to this data. The Bay Area finished 2013 with a 6 percent total unemployment rate, according to the Bureau of Labor Statistics.

In San Francisco, unemployment has dropped rapidly since Mayor Ed Lee took office in January 2011, when the jobless rate was 9.5 percent. The most recent figures from the state Employment Development Department — which does not publish jobless rates by race — pegged The City's unemployment rate at 3.8 percent, by far the rosiest employment figures since the first dot-com boom at the turn of the millennium.

The wide gulf in the jobless rate between ethnic groups living in the same city belies the idea that The City and state have fully recovered from the Great Recession, according to advocates with the leftist Center for Popular Democracy.

The group released the unemployment figures by ethnicity Thursday as part of a national campaign to convince the Federal Reserve Bank to keep interest rates low in order for the economic recovery to trickle down to all workers.

So far, "the recovery is based on white America alone," said Eisler, 36, a Bayview resident who holds an associates degree and a certified nursing assistant license. Her current job, the best she could find, does not cover her $1,800 a month rent, she said.

Statewide, the jobless rate for black people is 14 percent, according to the Economic Policy Institute, compared to 6.1 percent for whites, 8.5 percent for Latinos and 5.9 percent for Asians.

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Roll Call - May 14, 2014, by Kyle Serrette and Sabrina Joy Stevens - Our children are too precious, and education funding too scarce, to risk turning either over to unscrupulous or incompetent organizations. That’s why charter schools were originally supposed to be something akin to a small, controlled experiment: public school laboratories intended to encourage new ways to educate students. That way, if something turned out not to work, the risk to students, educators and communities could be contained.

Unfortunately, the modest educators and community members of the charter school movement’s early days have been eclipsed by members of the charter school industry: an industry rife with fraud, waste and abuse. Yet advocates, particularly among elected officials, have been unwilling to confront this fact and deal accordingly.

Fraud and abuse is rampant in the charter sector. Last week, our organizations issued a new report detailing how charter operators wasted or stole more than $100 million in taxpayer dollars. That number only reflects cases that have been reported in 15 states; it boggles the mind to consider what an examination of all states would uncover.

We found examples of operators embezzling millions in public funds for years before being detected, spending public funds on vacation homes instead of textbooks. In one case, someone bought a private airplane; in another egregious example, they used the money for visits to a strip club. In other cases, unfit operators just plain lost vast amounts of taxpayer money.

Sadly, H.R. 10, the charter schools bill recently approved by the House, fails to address the corruption within this poorly regulated industry.

Ignoring several representatives who offered common-sense amendments, the House passed a bill that fails to call for even basic protections like conflict-of-interest guidelines. It “requires” annual audits, yet allows states to waive the requirement, making it easier for fraudulent actors to hide their theft. It does not extend open meetings laws to charters, nor does it require charter operators to include community representation on their boards.

The bill further erodes community input and oversight by awarding priority status to states that allow entities that are not local education agencies (LEA) to be charter authorizers. Not only will this make it harder for local communities to control access to our tax dollars, it will also erode the quality and consistency of children’s education. For example, 17 charters abruptly closed in Columbus, Ohio, last year alone. In most cases, their non-LEA authorizers’ slipshod vetting processes missed red flags that would have allowed them to thwart fraud and mismanagement.

Disturbingly, the bill awards priority to states that don’t have charter caps, encouraging states to further accelerate charter growth before they’ve established the protections that could prevent the aforementioned abuses. States already struggle to monitor the charter schools they have; it is simply reckless to incentivize them to open more before establishing necessary protections.

H.R. 10 ignores many of the most pressing community concerns about charters. Any new funding for charter schools must encourage more, not less, oversight and involvement by local taxpayers and families. Specifically, a new bill should ban the practice of requiring parent contracts, one of many practices that charter operators use to avoid serving the neediest students.

Charter operators should also be required to collect and publicly report information on student attrition, mobility, and transfer before coming back to the public till. This crucial information will ensure that public funding stays with the students it’s intended to benefit. It will also allow families and policymakers to make informed comparisons between charter and public schools.

If our senators want to ensure success and opportunity through quality public schools, they should create legislative protections that promote quality, and mandate the transparency and accountability that make a school public. H.R. 10 does none of this. Children and taxpayers deserve better.

Kyle Serrette is the director of Education Justice Campaigns at the Center for Popular Democracy. Sabrina Joy Stevens is the executive director of Integrity in Education.

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